F5 (PM) – PART D – CBE MCQs – ACCA

These are ACCA F5 (PM) Performance Management MCQs for Part-D of the Syllabus “Budgeting and control”.

These multiple-choice questions (MCQs) are designed to help ACCA F5 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

  • Students should not attempt these MCQs until they have studied the entire chapter.
  • All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F5 (PM) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Association of Chartered Certified Accountants
Fundamental Level:Applied Skills
Subject:Performance Management
Paper:F5 – PM
Chapters and Topics Covered:
  • Budgetary systems and types of budget,
  • Analytical techniques in budgeting and forecasting,
  • Standard costing,
  • Material mix and yield variances,
  • Sales mix and quantity variances,
  • Planning and operational variances
  • Performance analysis
Syllabus Area:D – “Budgeting and control”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part D of the Syllabus; “Budgeting and control” of ACCA F5 (PM) Performance Management Module.

Time

These MCQs are not time-bound. Take your time and solve them stress freely. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F5 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

 

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F5 (PM) - Part D - MCQs - Budgeting and control

Course: ACCA - Association of Chartered Certified Accountants
Subject:
F5 (PM) - Performance Management
Syllabus Area: D - Budgeting and control
Chapters covered: Budgetary systems and types of budget, Analytical techniques in budgeting and forecasting, Standard costing, Material mix and yield variances, Sales mix and quantity variances, Planning and operational variances, Performance analysis
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

  1. If you are using mobile, turn on the mobile rotation and solve the MCQs on wide screen for better experience.

REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
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1 / 30

The following statements have been made about learning curves.

  1. Learning curves are easier to apply in companies with a high labour turnover than those with a lower rate of staff turnover.
  2. Learning rates are not affected by time gaps between the production of additional units of a product.

Which of the above statements is/are true?

2 / 30

A company makes and sells three products. Budgeted and actual results for the period just ended were as follows.

Budgeted Actual profit
Product Budgeted sales profit per unit Actual sales per unit
Units $ Units $
X 800 10 700 8
Y 1,000 6 1,200 6
Z 600 12 350 16
2,400 2,250

What was the adverse sales mix variance?

3 / 30

Which TWO of the following are arguments that variance analysis from a standard costing system is redundant in a total quality management environment?

4 / 30

Which TWO of the following points state why it is generally regarded to be more difficult to set standards for service function costs than for manufacturing costs?

5 / 30

The following statements have been made about standard mix and yield variances.

  1. Mix variances should be calculated whenever a standard product contains two or more direct materials.
  2. When a favourable mix variance is achieved, there may be a counterbalancing adverse yield variance.

Which of the above statements is/are true?

6 / 30

The following statements have been made about the application of standard costing systems.

  1. Standard costing systems are compatible with a Total Quality Management approach to operations.
  2. Standard costing systems are less commonly used in an industry that operates in a rapidly changing environment.

Which of the above statements is/are true?

7 / 30

A company makes and sells three products. Budgeted and actual results for the period just ended were as follows.

Budgeted Actual profit
Product Budgeted sales profit per unit Actual sales per unit
Units $ Units $
X 800 10 700 8
Y 1,000 6 1,200 6
Z 600 12 350 16
2,400 2,250

What was the adverse sales quantity variance?

8 / 30

The following statements have been made about standard mix and yield variances.

  1. Mix and yield variances enable management to resolve problems with the quality of production output.
  2. Persistent adverse mix variances may have an adverse effect on sales volume variances and direct labour efficiency variances.

Which of the above statements is/are true?

9 / 30

Which TWO of the following statements correctly describe an attainable standard?

10 / 30

Tech World is a company which manufactures mobile phone handsets. From its past experiences, Tech World has realised that whenever a new design engineer is employed, there is a learning curve with a 75% learning rate which exists for the first 15 jobs.

A new design engineer has just completed their first job in five hours.

Note. At the learning rate of 75%, the learning factor (b) is equal to –0·415.

How long would it take the design engineer to complete the sixth job?

11 / 30

The following statements have been made about flexible budgets.

  1. Flexible budgets enable proper comparisons to be made between actual and expected revenues and costs.
  2. In every variance reporting system with flexible budgets that compares budgeted and actual profit, there must be a sales volume variance.

Which of the above statements is/are true?

12 / 30

A standard product uses 3 kg of direct material costing $4 per kg. During the most recent month, 120 units of the product were manufactured. These required 410 kg of material costing $4.50 per kg. It is decided in retrospect that the standard usage quantity of the material should have been 3.5 kg, not 3 kg.

What is the favourable materials operational usage variance, if it is chosen to use planning and operational variances for reporting performance?

13 / 30

Which of the following correctly describes a standard hour?

14 / 30

Total production costs for 900 units of output are $58,200 and total production costs for 1,200 units are $66,600.

The variable cost per unit is constant up to a production level of 2,000 units per month, but a step up of $6,000 in the monthly total fixed cost occurs when production reaches 1,100 units per month.

What is the total cost for a month when 1,000 units are produced?

15 / 30

A company sells two products X and Y. Product X sells for $30 per unit and achieves a standard contribution of $12 per unit, which is 40% of the selling price. Product Y, a new product, sells for $80 per unit and achieves a standard contribution of just $10 per unit, which is 12.5% of the selling price. Budgeted sales are 5,000 units of X and 3,000 units of Y.

However, the sudden cancellation of an advertising campaign for Product Y has meant that sales for the product will be well below budget, and there has been some price discounting in an attempt to obtain sales for the product. Sales of X were in line with the budget.

Which of the following sales variances, if calculated, would you expect to show a favourable variance for the period?

16 / 30

Which of the following provides the most suitable definition of the controllability principle in business?

17 / 30

The following information is given about standard and actual material costs during one month for a production process.

Material Standard cost Actual cost Standard mix Actual mix
per kg per kg kg
P 3.00 3.50 10%    820
Q 2.50 2.75 20% 1,740
R 4.00 3.50 30% 2,300
S 5.25 5.00 40% 2,640
 7,500 

What was the favourable materials mix variance?

18 / 30

What is an attainable standard?

19 / 30

For which of the following variances should a production manager usually be held responsible?

20 / 30

In which TWO of the following ways might a budgetary control be a disincentive to management to achieve targeted performance?

21 / 30

Vibrant Paints Co manufactures and sells paints. Business Unit A of the company makes a paint called Micra is made using three key materials: R, S and T.

At the end of period 1, a total material cost variance of $4,900 adverse was correctly recorded for Micra.

The following information relates to Micra for period 1:

Standard cost Actual cost Actual usage
Material per litre ($) litre ($) (litres)
R 63 62 1,900
S 50 51 2,800
T 45 48 1,300

The standard ratio of mixing material R, material S and material T is 30:50:20.

The material price variance for Micra has been correctly calculated as $4,800 adverse.

What is the total material yield variance for Micra for period 1?

22 / 30

The first item of a new product took 2,000 hours to manufacture (at a labour cost of $15 per hour). A 90% learning curve was expected to apply, and it was decided to establish a standard time as the time required to manufacture the 50th item of the product, rounded to the nearest hour. The 50th item actually took 980 hours.

What is the labour efficiency variance for the 50th unit produced?

23 / 30

For which of the following reasons is zero-based budgeting (ZBB) often considered more suitable for public sector service organisations than for private sector companies?

24 / 30

A company operates in export and import markets, and its operational cash flows are affected by movements in exchange rates, which are highly volatile. As a result, the company has great difficulty in establishing a budgeting system that is reliable for more than three months ahead.

Which of the following approaches to budgeting would be most appropriate for this company's situation?

25 / 30

Are the following statements about zero-based budgeting true or false?

  1. Employees will focus on eliminating wasteful expenditure.
  2. Short-term benefits could be emphasised over long-term benefits.

26 / 30

A budget that is continuously updated by adding a further accounting period (a month or quarter) when the earlier accounting period has expired is known as which of the following?

27 / 30

Which of the following is the LEAST likely reason why standard costs might not easily be applied to road haulage and distribution services?

28 / 30

The following cost information relates to product XY, which is produced in a continuous process from several different materials.

$
Actual quantity of materials at standard price 19,960
Actual quantity of materials at actual price 23,120
Actual yield at standard materials cost 20,800
Standard yield from actual input of materials at standard cost 19,552

What is the favourable materials yield variance for the period?

29 / 30

Capacity levels used in setting standard absorption rates for production overheads are often related to performance standards.

To which performance standard is budgeted capacity often associated?

30 / 30

Which TWO of the following statements are true in the context of a just in time (JIT) inventory system?

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